Monday, February 06, 2012

The Gold Price Five Day Chart must not Breach Support Around $1,715 Otherwise $1,675 will be the Next Stop

Gold Price Close Today : 1722.80
Change : -15.10 or -0.87%

Silver Price Close Today : 3372.20
Change : -0.003 cents or -0.01%

Gold Silver Ratio Today : 51.088
Change : -0.443 or -0.86%

Silver Gold Ratio Today : 0.01957
Change : 0.000168 or 0.87%

Platinum Price Close Today : 1625.20
Change : 3.70 or 0.23%

Palladium Price Close Today : 705.15
Change : 0.15 or 0.02%

S&P 500 : 1,344.33
Change : -0.57 or -0.04%

Dow In GOLD$ : $154.13
Change : $ 1.15 or 0.75%

Dow in GOLD oz : 7.456
Change : 0.056 or 0.75%

Dow in SILVER oz : 380.91
Change : -0.47 or -0.12%

Dow Industrial : 12,845.13
Change : -17.10 or -0.13%

US Dollar Index : 79.02
Change : 0.072 or 0.09%

The Silver and GOLD PRICE have just about locked up my mind today. Nothing about this jells.

The GOLD PRICE fell $15.10 to $1,722.80, which after Friday was to be expected. The SILVER PRICE, on the other hand, after making a low at 3305c when New York was just opening, traded up like a basketball released underwater, hit a high of 3378.2c, then closed -- get this -- three-tenths (3/10) of a cent lower than Friday.

That's a thorny non-confirmation. Overnight SILVER PRICE did the expected, fell down to its next support at 3300c, as gold did. But whence arose all that enthusiasm that floated it back to practically unchanged?

Could mean several different things. First, NGM might have been busy pushing gold down so that the euro wouldn't tank, and got too busy to push down silver, too. But let's deal with the non-confirmation, which whispers that either gold's fall or silver's rise was false. And since silver is the little brother here, which under such circumstances should be weaker, I'm tempted to guess that gold doesn't intend to go much lower. After all, low today was $1,713.12, fairly strong given Friday's stumble.

Metals are blowing hot and cold out of both sides of their mouth. Five-day gold chart must not breach support around $1,715. If it does, $1,675 will be the next stop, and despite today's puzzling non-confirmation, we ought to expect that because that's where the short term trend is headed: down.

If silver steps through 3300c, 3100c is a likely target. 50 DMA stands at 3099c.

Well, a Greek Debt Deal is still Near, but drawing nearer only glacially. For some reason, the Greeks refuse to co-operate with their own economic rape. Hard to know who to back in this one, the Greeks who brought this on themselves by following the "government can support everybody" theory, or the purveyors of phony money -- IMF, ECB, and European Commission -- who make the theory plausible, at least until it metastasizes beyond the economy's ability to support the blood loss.

Then there's that bailout. Amazing how investors will lose half of their claim in Greek bonds, but it will be called a "swap" or some such euphemism so that the banks that sold the insurance against a Greek bond default (derivatives) won't have to pay the investors' losses. As George Orwell's pigs remarked in Animal Farm when the other animals noticed them acting just as the farmer had before the Revolution, "All animals are equal, but some are more equal than others."

How do y'all like "Government of the banks, by the banks, and for the banks"?

Not surprising anyone, the euro had a tough day today. Closed down 0.17% at 1.3133, but dipped as low as 1.3028. Lurching through 1.3000 would demolish enthusiasm for the euro.

Japanese yen bounced like a dead cat, rising 0.08% to 130.66c/Y100 (Y76.53/US$1). This leaves the yen below support and it could well plunge to 128.25c. But who can ken the ways of fiat money? Might put on any sort of technical pattern, then for hidden policy reasons the Nice Government Men smash the pattern.

Stocks couldn't penetrate last resistance at last May's high (call it 12,850 - 12,875). Oh, 'twasn't a large drop, just 17.1 points (0.13%) for the Dow, which ended at 12,845.13. S&P500 gave up even less, 0.57 point (0.04%) to 1,344.33.

HOWEVER, if you will picture the ballistics curve for any flying object, you will notice a portion when the ascent rate slows, the curve rolls over as the object loses momentum, then begins to descend. Loses momentum -- how stocks felt today.

Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.

- Franklin Sanders, The Moneychanger

© 2012, The Moneychanger. May not be republished in any form, including electronically, without our express permission.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down.

WARNING AND DISCLAIMER. Be advised and warned:

Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures.

NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps.

NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced.

NOR do I recommend buying gold and silver on margin or with debt.

What DO I recommend? Physical gold and silver coins and bars in your own hands.

One final warning: NEVER insert a 747 Jumbo Jet up your nose.